Joe Tidd is Professor of technology and information management at SPRU (Science and Technology Policy Research) and visiting Professor at University College London, Cass Business School, Copenhagen Business School, and Rotterdam School of Management. Dr Tidd was previously Head of the Management of Innovation Specialisation and Director of the Executive MBA Programme at Imperial College.

John Bessant holds the Chair in Innovation and Entrepreneurship at Exeter University where he is also Research Director. In 2003, he was awarded a Fellowship with the Advanced Institute for Management Research and was also elected a Fellow of the British Academy of Management. He served on the Business and Management Panel of both the 2001 and 2008 Research Assessment Exercises. He has acted as advisor to various national governments and to international bodies including the United Nations, The World Bank and the OECD.

Acknowledgements xiv

Preface to the Fifth Edition xv

How to Use This Book xvii

Part I Managing Innovation 1

Chapter 1 Innovation – What it is and Why it Matters 3

1.1 Introduction 3

1.2 Why Innovation Matters 5

1.3 Innovation and Entrepreneurship 8

1.4 How Innovation Matters 9

1.5 Old Question, New Context 15

1.6 What is Innovation? 18

1.7 A Process View of Innovation 21

1.8 Scope for/Types of Innovation 23

1.9 Exploring Different Aspects of Innovation 30

1.10 Managing Innovation . . . 46

Summary and Further Reading 53

References 55

Chapter 2 Innovation as a Core Business Process 59

2.1 Introduction 59

2.2 Variations on a Theme 61

2.3 A Contingency Model of the Innovation Process 74

2.4 Evolving Models of the Process 75

2.5 Can We Manage Innovation? 79

2.6 Building and Developing Routines Across

the Core Process 82

2.7 Learning to Manage Innovation 83

2.8 Measuring Innovation Success 85

2.9 What Do We Know About Successful

Innovation Management? 85

2.10 Success Routines in Innovation Management 88

2.11 Beyond the Steady State 95

Summary and Further Reading 98

References 99

Part II Context 105

Chapter 3 Building the Innovative Organization 107

3.1 Shared Vision, Leadership and the Will to Innovate 109

3.2 Appropriate Organization Structure 115

3.3 Key Individuals 120

3.4 High Involvement in Innovation 124

3.5 Effective Team Working 132

3.6 Creative Climate 139

3.7 Boundary-Spanning 155

Summary and Further Reading 161

References 161

Chapter 4 Developing an Innovation Strategy* 169

4.1 ‘Rationalist’ or ‘Incrementalist’ Strategies for Innovation? 170

4.2 The Dynamic Capabilities of Firms 182

4.3 Appropriating the Benefi ts from Innovation 188

4.4 Technological Trajectories 195

4.5 Developing Firm-Specifi c Competencies 198

4.6 Globalization of Innovation 212

4.7 Enabling Strategy Making 218

Summary and Further Reading 224

References 225

Part III Search 231

Chapter 5 Sources of Innovation 233

5.1 Where do Innovations Come From? 233

5.2 Knowledge Push . . . 234

5.3 Need Pull . . . 236

5.4 Whose Needs? 243

5.5 Towards Mass Customization 249

5.6 Users as Innovators 252

5.7 Extreme Users 256

5.8 Watching Others 258

5.9 Recombinant Innovation 259

5.10 Design-led Innovation 260

5.11 Regulation 262

5.12 Futures and Forecasting 262

5.13 Accidents 263

5.14 A Framework for Looking at Innovation Sources 266

5.15 How to Search 268

5.16 Absorptive Capacity 271

5.17 Balancing Exploitation and Exploration 273

5.18 Tools and Mechanisms to Enable Search 274

5.19 Two Dimensions of Innovation Search 284

5.20 A Map of Innovation Search Space 286

Summary and Further Reading 292

References 293

Chapter 6 Innovation Networks 299

6.1 No Man is an Island . . . 299

6.2 The ‘Spaghetti’ Model of Innovation 301

6.3 Innovation Networks 302

6.4 Networks at the Start-Up 309

6.5 Networks on the Inside . . . 311

6.6 Networks on the Outside 313

6.7 Networks into the Unknown 316

6.8 Managing Innovation Networks 319

Further Reading and Resources 323

References 324

Part IV Select 327

Chapter 7 Decision Making Under Uncertainty 329

7.1 Introduction 329

7.2 Meeting the Challenge of Uncertainty 330

7.3 The Funnel of Uncertainty 330

7.4 Decision Making for Incremental Innovation 332

7.5 Building the Business Case 336

7.6 Building Coalitions 336

7.7 Spreading the Risk – Building a Portfolio 338

7.8 Decision Making at the Edge 339

7.9 Mapping the Selection Space 346

Summary and Further Reading 354

References 354

Chapter 8 Building the Innovation Case 359

8.1 Developing the Business Plan 359

8.2 Forecasting Innovation 362

8.3 Estimating the Adoption of Innovations 369

8.4 Assessing Risk, Recognizing Uncertainty 378

8.5 Anticipating the Resources 384

Summary and Further Reading 399

References 400

Part V Implement 403

Chapter 9 Creating New Products and Services 405

9.1 Processes for New Product Development 405

9.2 Infl uence of Technology and Markets on Commercialization 421

9.3 Differentiating Products 425

9.4 Building Architectural Products 430

9.5 Commercializing Technological Products 437

9.6 Implementing Complex Products 441

9.7 Service Innovation 446

Summary and Further Reading 456

References 457

Chapter 10 Exploiting Open Innovation and Collaboration 461

10.1 Joint Ventures and Alliances 461

10.2 Collaborating with Suppliers to Innovate 486

10.3 User-Led Innovation 491

10.4 Benefi ts and Limits of Open Innovation 493

Summary and Further Reading 496

References 497

Part VI Capture 503

Chapter 11 Exploiting Entrepreneurship and New Ventures 505

11.1 What is a Venture? 505

11.2 Internal Corporate Venturing 517

11.3 Spin-Outs and New Ventures 538

Summary and Further Reading 559

References 560

Chapter 12 Capturing the Benefi ts of Innovation 565

12.1 Creating Value Through Innovation 565

12.2 Innovation and Firm Performance 569

12.3 Exploiting Knowledge and Intellectual Property 573

12.4 Broader Economic and Social Benefi ts 595

12.5 Choosing a Business Model 611

Summary and Further Reading 618

References 619

Chapter 13 Capturing Learning from Innovation 623

13.1 What have We Learned About Managing Innovation? 623

13.2 How can We Build Dynamic Capability? 625

13.3 Learning to Manage Innovation 626

13.4 Tools to Help Capture Learning 628

13.5 Innovation Auditing 630

13.6 Measuring Innovation Performance 631

13.7 Measuring and Developing Innovation Management Capability 632

13.8 Using the Framework 637

13.9 Variations on a Theme 638

13.10 Final Thoughts 642

Summary and Further Reading 644

References 644

Index 647

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